An exclusive introduction to Mexus Gold US
We have received a number of questions from listeners regarding Mexus Gold US (MXSG) so we decided to have them on the show. Today we chatting with Paul Dent, head of investor relations, to see how the Company is moving forward with its Santa Elana mine in Mexico.
Please let us know what you think of the Company and if you have any follow up questions.
Click download link to listen on this device: Download Show
have you seen orezone /orzcf today? got it’s butt kicked BIG TIME!
dw jones. Yes – It is all the rage over at ceo dot ca ….. I actually follow it closely with the West African Gold sector, but luckily am not a shareholder. About a week or two ago I mentioned wanting to start a position on a pullback, but this is all out smash down.
With the 30% reduction in oxidized resources, it will definitely affect the mine life and economics and the sell-off today makes sense. I feel bad for a few of my trading buddies that lost a big chunk of change all in one day. Eric Coffin had some great insights in the (ORE) chatroom today about how this really traces back to computer modeling for resource estimation, and the inherent problems with the NI 43-101 standards, the way the 3rd party companies calculate these resources and reserves, and how this could happen to other companies that look and smell good at present.
The other challenges brought up after the trading halt & news release were the placation of the artisinal miners and the environmentally “sensitive” areas…. both of which likely had political pressure applied to them.
This is really a story, like Rubicon, that highlight a larger issue that miners face, and it likely won’t be the last time we see a resource estimation implode or take a haircut.
For those that want to delve into the muck and mire of the Orezone fiasco today with a goal of better understand the situation, the implications, and how to more thoroughly review resource estimates moving forward…check out this chat room:
(you’ll need to scan up to older comments as there have been pages and pages of comments, questions, arguments, debates, pointers, and a range of opinions)
Thanks Al/Cory! Very exciting.
Agreed. This was cool to have Paul Dent on the show today. I’ve turned a pretty penny on Mexus Gold so far in 2016, but am excited about what the future will hold. I also like when companies JV a project so they don’t get stuck dead in the water. If more companies would bring in a partner and give away some of the resource (but at least move it forward) versus trying to be heroes and diluting the snot out of their long time investors, then there would be more success in this sector and less angry investors. Well done Mexus Gold (MXSG) for having a clue and taking positive action.
Totally agree, Excelsior. I’m more than happy with Marmar so far. They get things done then talk about it later. This is going to be huge.
Yes, Marmar has been ahead of schedule, got them bigger heap leach pads to improve the economics, and they are taking action. I’m impressed so far.
It was mentioned that they are trading at a low level at $.07, and Cory mentioned they’ve had a “decent run.”
(MXSG) is up 1,800% this year so yeah…… I’d call that decent. There were a few stocks that had runs like that this year (like Silvercrest) but not many……
My point is that an 1,800 % gain is excellent….not just decent.
Mexus Gold Chart with the (GDXJ) Jr Gold ETF on for a comparison as to how they’ve done:
http://stockcharts.com/freecharts/perf.php?MXSG,GDXJ&p=4&O=011000
It’s been a fun ride, Excelsior. Much more upside coming. As the interview indicates, they haven’t even scratched the surface yet. No pun intended.
Absolutely. I just wish I would have bought a larger position while the getting was good. 🙂
As you say though….things are just getting started, and they haven’t even made it into production yet, so that announcement will likely bring in a few investors that are watching from the sidelines at present. Then there is all the discovery upside on both their properties coming down the pike….
Ex, holy smokes, Mexus has already been diluted into the ground.
These guys have 486 Million shares outstanding. Not trying to rain on anyone parade but that is a boatload of shares and really reduces the leverage for rapid price gains.
Still an interesting company though with the production and all. Additionally I know that a few of you guys, maybe it was you and Matthew don’t get too hung up on large share dilution like I do and tend to gravitate to the market caps and other metrics for evaluation purposes.
Really enjoy the thoughts and discussion on the little miners and explorers.
V
V
They do have more shares outstanding than others, Vortex, but think of it this way…. 10 for 1 rollback would put us around where GORO is now 54 million shares. Puts Mexus at $.80 with the potential to do what GORO did back during the 2010 runup to $30 a share.
Ryan,
I get where you’re trying to go and it makes a lot of sense on the surface but the rollback option just kills all of the early shareholders. Dilution just stinks to high heaven.
And in reality there is no guarantee that Mexus would ever achieve those fantastic GORO numbers. But still worth discussing.
thank you
V
Good thoughts guys. I agree Ryan that with 54 million shares Mexus would be leaner and meaner, and could have an epic run. I’d have to look into what Goro did in the last cycle. In addition Vortex makes a good point that there are no guarantees it would make if from $.80 to $30 or have the same success, but there is also no telling where metals prices will head over the next 3-4 years, or how their mine will perform as they get production ramped up, or how their resources will grow through exploration. I guess that’s why they call it Speculation.
It wouldn’t hurt my feelings if MXSG went from $.80 to $10.00 though…. 😮
Totally agree that dilution stinks to high heaven, but thankfully most of it will be behind us once productions starts. Then if we do have a rollback, it wouldn’t have an impact on existing shareowners as long as they build out as they go. Sounds like that’s the plan, but only time will tell.
I think GORO did around 60,000 ounces their first full year and it hit $20 a share. Thinking/Hoping the Mexus/MarMar JV will do 100,000 ounces which will put with the big boys.
Interesting. I was thinking they may start smaller 40-50K, and build up to 100K ounces per year over 2-3 years. It all starts with the first ounce poured.
Agree Excelsior. Not saying I expect Mexus to do 100K during their first year, but think that will be their goal down the road if not more.
OK. I gotcha now. At first I thought maybe I underestimated how quickly they’d be ramping up production. I normally consider a Gold producer “Small” until they can break the 100,000 ounces per year production milestone, where I graduate them up to “Mid-Tier”, and then at 1,000,000 ounces per year they become a “Major”.
With Mexus, I’d be thrilled with 30K, 40k, 50K for 2017, and then maybe 50K-80K in 2018 or or 2019, and then 100K+ by 2020 and beyond…..
Hey Vortex – Hope all is well man.
Yes, you raise a valid point, and it isn’t the tightest share structure. ( 🙂 ) I actually could see them doing a (7-10 x) share rollback at one point in the future; after they are in production for a while. This would attract more institutional investors, but I’ve been mainly interested in their development into production story for this chapter of the adventure.
Even if they do eventually roll the # of shares back, I don’t think that will have nearly the negative impact in a Bull market that it has with companies during a Bear Market. Generating some revenues and advancing their exploration targets will keep the petal to the metal. (unless the metals fall back out of bed)
Ex,
A bunch of very good points. Full disclosure, I’m just one of those goofy guys who hates massive dilution to the point where I simply won’t invest in some good stories just because of the excessively high share counts.
I think I may need to become a bit more flexible and take a chance on some of these story’s that could turn out well even with a rollback.
You are a much wiser investor than I am then. Seriously, I’d prefer a tight share structure over a mess any day of the week, but I find the largest percentage gains on the penny stocks. I do short-duration trades and love the pops and drops. I’ve already been in and out of Mexus 3 different times this year, but finally convinced myself to hang onto a core position for the last few months.
I guess what flipped my lid was when I started trading Australian companies with Billions of shares… Ha!
The risk of a rollback is ever-present with the higher share count companies though, and I’ve been diluted down in a major way in the past and it is a pisser – no doubt. Again, in the Bear Market, it was like Russian roulette to hold a company that could roll them back on you, but in a Bull market, it won’t be so damaging if the general trend is up for the mid to longer term.
Vortex,
I really hate dilution, too, but can overlook it in some cases. Americas Silver is a good example. It’s got about 350M shares out plus 77M warrants and options but I still decided to buy way too much of it as it plunged to five-and-a-half cents in January. It went on to rise nine-fold in 7 months because the share count doesn’t mean much if certain other factors are in place.
As Skeeta can attest, Australian juniors typically have five to ten times as many shares out as their Canadian counterparts but perform very similarly.
+1 to Matthew’s comment:
“the share count doesn’t mean much if certain other factors are in place.”
Either an investment has merits, or it hasn’t.
My 2cts.
LPG
Ex, Matthew, Ryan and LPG, great discussion. I love all the views and varying opinions.
Thanks guys!
V
Hi dw jones – you probably already did, but if not…..check out the Ore Zone chat room today on there. It has been absolutely crazy today, and a few posters lost their cool with one another, but there were actually a number of great points made by the investors on that forum.
When things like this happen to a high profile company in the mining industry, it is important to find out how it became a mess, and how to spot caca in a companies info on a move forward basis. Rigging or manipulating numbers intentionally or just through poor modeling methods and computer programs (as was the case here) in resource estimations are not something we’ve heard the end of….
Mexus has a 3rd mine has already been in production can be seen on the web site. Original Mina San Felix sold in ’14 for $4 mil for 50% owned. Contract was NOT fulfilled and in process of regaining possession. As Paul Dent says Paul Thompson is VERY understated!
Don Phillips – Very cool – didn’t realize that they were going after the 3rd mine.
Paul Dent was very candid in regards to Mexus. I Think that 2017 will be enormous for Mexus.. I wished he could have hinted at some sort of production target ionterval, but hey that will come when it comes.
Agreed. I’m very curious about production details, but I’d rather wait it out and have it be on target than to over promise the marketplace. There are just a number of investors waiting for that info until they feel things are de-risked enough to jump on board. It’s going to fascinating to watch this story develop.
More interviews to follow in the weeks and months to come. That’s almost a certainty.
happy that the other Projects were mentioned too!
Product? Marco Martinez. an original contractor at La Herradura feels, unofficial, a 20 year mine minimum 100K oz yr and is BEGINNING pit with 6 above ground veins. La H just got to such down 1000M on the flat lands 30KM away. Sole reason accepted very short JV offer( 3 sentences )
and absorb the production cost after the small pad/ plant cost iis paid down at probably the 1st Sept pour. Hard to believe but that’s the entire 3 sentences, Turns from NET 50% to Gross in 3rd sentence!
+1
I want that $1/share. It will come next year. Heck why not 1 buck a year after that!
CARSON CITY, Nevada May 23rd, 2016: Mexus Gold US (OTCQB:MXSG)(“Mexus” or the “Company”) announced today that it has entered into a joint venture agreement with MarMar Holdings of Mexico at its Julio/Santa Elena property. Under the 50/50 joint venture agreement, MarMar will operate the mine and carry all costs
Low cost? Vinyl lined pad and ponds said to be done and 1st blast now loading crush 60K tons. Simple electrowinning steel wool tanks burned off to pour. The 2nd sentence in JV? MarMar gets paid back approx. $300K cost with initial 95% and Mexus takes 5% . Says? 1st 400 oz of 60K @ 2 gr = 3,000+ oz @ $1300 POG then is paid off(400 oz a rounding error! ) Or Marco cooked the books. Thing is? The Balthazar family owns the rancho and are shareholds plus override to know like century old back of hand. Simple all around. Media on web site gives you Paul T, Oscar B the dad and Marco at Caborca Pioneer steak house all agreed quaffing suds.
http://www.mexusgoldus.com/photos.php
Much appreciated Don Phillips.
Might like to know I was the 1st Gold Resource investor @ .25 in 2002. And DID take it to GORO $30. Had to something with ridiculous Roth IRAs and chose Mexus to also empty wife’s SEP at age 70 in 2010. Rest’s been keeping the beast alive until we took on Marco this May 23. PT will NOT reverse, plan is after Divs to buy back. Very level headed guy and just says what else do you do with a $ billion or 2? .
Nice. $.25 – $30.00 must have been a fun ride.
As for the reverse split, if they actually didn’t do that and bought back the outstanding shares instead, I’d be a much happier investor 🙂
At 25 cents you beat the heck out of me but I did start buying GORO at $1.30 a month after their IPO in Sept. ’06. I didn’t sell a share until it hit $10 almost four years later (I sold 25%). I sold the rest for as much as $30+ but none less than $23.
The 72 cents per share per year dividend was fantastic considering my average purchase price of about $2.30/share.
You’ll be given a hefty dividend in Mexus too .
I’ve been both places. Bill Reid had been Denver Gold Forum Pres and in 2005-11 could go rubber chicken $54 mil to build El Aguila as GORO. After 2011? No new mine funds and PT don’t speak rubber chicken so just had me and a few listeners. Ergo dilution but near same result with 10 times the resource just on the surface to begin at Ste Elena 8
Mexus Gold’s shareprice would be sooooo myúch higher if if they could only give on official statement of how much they aim to produce in 2017! Why not say “Between 70-100 000oz if there is where it will land? 50% of that is more than enough to see the market cap soar 10 x!
The guest was simply being conservative, abel.
Al
Gary Johnson seems to have some good policy ideas, and could be a great alternative to Trump and Clinton. Is there any reason you are not talking about him on your podcasts?
Don Hendon